Very low, aggressive bids are highly likely, without being the dominant feature, in an ongoing tender for battery energy storage systems (BESS), according to a Grant Thornton report on the process, the first of three segments.

Most participants will operate within reasonable and expected limits based on the existing data, the Grant Thornton report, just published, noted.

RAAEY, the Regulatory Authority for Waste, Energy and Water, is expected to publish a provisional list of selected and excluded tender participants on August 3, ahead of a finalized list of successful bidders by August 10.

The ongoing tender for energy storage systems has turned out to be a challenging exercise as participants have been called upon to solve and financially model complex issues, the Grant Thornton report pointed out.

Auction participants who can achieve economies of scale or benefit from a centralized sourcing strategy will establish a significant cost advantage over smaller participants, the report noted.

Also, many participants can be expected to break their bids into smaller projects in order to secure a place on the shortlist, it added.

Most revenue will come from the balancing market and the Ancillary Services Market in the early years of battery operation, the report noted.

In addition, strong competition and technological improvements will lead to a reduction in system costs in the medium term, the Grant Thornton report projected.

A total of 96 bids representing a total capacity of 3.3 GW have been submitted to the tender’s first phase.